Elon Musk is eager to bring his Starlink satellite broadband to India, but the world’s richest man faces stiff resistance from Mukesh Ambani, Asia’s richest man, who runs Indian telecoms giant Reliance Jio.
After a meeting with Indian Prime Minister Narendra Modi in the United States on Tuesday, Musk said he was looking forward to launching Starlink in India, which “could be incredibly useful” in remote villages that don’t have internet or lack high-speed services.
What he didn’t talk about is how Starlink is at odds with Ambani’s trust in the government’s satellite allocation of broadband spectrum, setting the stage for a battle between two of the world’s richest men for satellite services in the world’s most populous nation.
Starlink is pushing India not to auction off the spectrum but just allocate licenses in line with a global trend, saying it is a natural resource that should be shared by companies. An auction could impose geographic restrictions that will increase costs, it said in company letters released by the Indian government this month.
Reliance disagrees and called for an auction in a public submission to the government, saying foreign satellite service providers could offer voice and data services and compete with traditional telecom players and therefore there must be an auction to reach a level playing field.
In signs of the rivalry deepening, an industry source with direct knowledge said Reliance would continue to pressure the Indian government to auction satellite spectrum and not comply with the demands of foreign companies.
The stakes are high for Musk. His push comes after an attempt to launch Starlink in India in 2021 ran afoul of local regulators for accepting unlicensed bookings, and just as he is in talks with India to open a Tesla factory.
For Ambani, keeping foreign competition at bay in satellite broadband will be another shot in the arm – his Reliance Jio already has 439 million telecom users, making it the market leader, and 8 million wired broadband connections, a 25% market share.
Starlink’s view on auctions is shared by Amazon’s satellite internet initiative Project Kuiper and British government-backed OneWeb.
Amazon declined to comment. The Telecommunications Regulatory Authority of India, OneWeb and SpaceX, Starlink’s parent company, did not respond.
Asked for comment, Reliance referred Reuters to its own government and Starlink submissions.
AUCTION VS LICENSING
Of the 64 responses from companies, industry groups and others to India’s public consultation on satellite spectrum, 48 favored licensing, 12 voted in favor of an auction, with the remainder neutral, according to India’s Koan Advisory.
A second industry source said Reliance believes opening the floodgates to established foreign companies like Starlink without an auction will allow them “runaway success” like Amazon, which will hurt Indian companies and create an uneven playing field.
Ambani’s Reliance Retail took on Amazon but trailed its US rival in market share in the e-commerce space.
Deloitte says that India’s satellite broadband services market will grow by 36% per annum to reach US$1.9 billion (approximately INR 14,000 crores) by 2030.
Starlink says it is already licensed in 84 administrations worldwide and has 1.5 million active users of its low-latency broadband services. Amazon plans to launch its first set of satellites in 2024.
Foreign satellite internet companies are concerned that an auction from India will make other nations more likely to follow suit, increasing costs and investment, said one of the sources, an Indian consultant to a foreign company.
If India decides to hold an auction, OneWeb will struggle to do business in the country, an industry source says. Starlink is waiting for clarity on India’s spectrum allocation before firming up its commercial strategy, another source said.
Tim Farrar, an analyst at US consultancy TMF Associates, said it would set a “bad precedent” for Starlink to pay a substantial auction price in India when it is obtaining low-cost licenses in many other countries.
“I expect Starlink to make high profile free offers elsewhere to try to demonstrate what India may be missing out on,” he said.
© Thomson Reuters 2023